GM boss Fritz Henderson confident over Opel deal

The boss of General Motors says the American car maker wants to sign a deal
with Magna to sell Opel and Vauxhall by early October, despite the European
Union promising a "very severe" examination of the potential
tie-up.

Fritz Henderson, the GM chief executive, denied that the car maker was still considering alternatives following an initial agreement with Magna last week, despite the fact certain issues, such as how to implement joint purchasing, are yet to be finalised.

"I don't see any deal-breakers today," Mr Henderson said at the Frankfurt Motor Show. "We want this deal to close. We want Opel to succeed – period."

The 5,000 GM staff in the UK, primarily based at Vauxhall plants at Ellesmere Port and Luton, have been in limbo ever since the American company revealed plans to sell a stake in its European business earlier this year.

The workers now face an anxious wait to discover whether they will be part of the 10,500 job cuts Magna wants to make across Europe.

Mr Henderson said that the restructuring plans were "sufficient" and could ensure that Opel and Vauxhall make a profit by 2011.

However, Vauxhall workers fear they face major cuts because Germany, where the majority of GM Europe staff work, is financially supporting the deal with €4.5bn (£4bn).

Lord Mandelson, the Business Secretary has said there must not be a "political fix", while the Spanish and Belgium governments have appealed for the EU to review Germany's support. Opel's Antwerp plant is expected to close under Magna's plans, costing around 2,500 jobs.

However, Flemish regional leader Kris Peeters said that Neelie Kroes, the EU Competition Commissioner, told him that the examination of the deal will be "very severe". Commercial factors are the only acceptable reasons for cutbacks, he added.

European governments, including the UK, are meeting this week to discuss how much financial support they will provide for the Magna deal. A spokesman for Lord Mandelson said the process was at an "early stage" and the UK will only decide on the amount of aid it will deliver when Magna's business plan has been confirmed.

Decisions about state aid, and an inquiry by Ms Kroes, threaten to delay the acquisition of a majority stake in Vauxhall and Opel by Magna and its investment partner, Russian bank Sberbank.

However, Mr Henderson said he hoped a deal could be finally completed by November, while accepting that it could be delayed by up to month.

The GM boss said the US car maker did not have a buy-back option as part of the agreement with Magna, and was not concerned about the possibility of Sberbank selling its 27.5pc stake to Oleg Deripaska's Russian car maker Gaz.

Concerns about the use of GM's intellectual property in Russia by Magna and its industrial partners, including Gaz, were one of the reasons why the American company took so long to reach an agreement with Magna over a deal.

"We're OK with that. We've been OK with that. So if they were to do it tomorrow there would be no problem," Mr Henderson said.